1429 4997 1 PB

50 ______________________The Copenhagen Journal of Asian Studies 252007
Thomas Menkhoff, Ulrike Badibanga & ChayYue Wah __________________________

Managing Change in Asian Business:
A Comparison between Chinese Educated and
English Educated Chinese Entrepreneurs in
Singapore
THOMAS MENKHOFF, ULRIKE BADIBANGA & CHAYYUE WAH
Abstract
Against the background of the current rapidly changing business environment,
the article examines the organizational change management behaviour of the
owner-managers of small and medium sized enterprises (SMEs) in Singapore.
The analysis of survey data is aimed at ascertaining whether there are any dif-
ferences between Chinese and English educated small (ethnic Chinese) busi-
nessmen in terms of Change Management (CM), a dichotomy that is of great
historical and politico-cultural signicance in Singapore. The survey data show
that there are indeed differences between the subgroups (eg with regard to the
initiation of a more participatory people management style) but these variations
turned out to be far less pronounced than expected. Access to information and
actionable managerial knowledge appears to be a key precursor to the various
change management approaches used by both groups. Chinese educated busi-
nessmen in particular seem to be somewhat disadvantaged in this respect, as
modern change management literature is still largely only published in English
1
.
Keywords: Ethnic Chinese, small and medium-sized enterprises (SME), Republic of
Singapore, organizational change management.
Introduction and Context of Problem
Most enterprises operating in Asia are small and medium-sized (family)
rms (Chong 1987; Buchholt and Menkhoff 1996; Tsui-Auch 2003, 2004;
Menkhoff and Chay 2006). Their economic success has often been attrib-
uted to the so-called 'Chinese cultural heritage'. 'There is a worldwide
recognition that ethnic Chinese, wherever they have sunk new roots,
have contributed signicantly to the wealth of their adoptive lands and
in the process, to nation-building. They were able to overcome severe
odds and difculties through thrift, hard work, perseverance, tolerance,
and above all, their entrepreneurial spirit which constitute part of the
_________________________________________________________________________51
__________________________________________ Managing Change in Asian Business
core values of the Chinese cultural heritage' (Encounter, Singapore Chi-
nese Chamber of Commerce and Industry). Since the Asian economic
crisis, culture-centric explanations of Chinese business behaviour have
been replaced by an alternative proposition according to which cul-
tural factors alone are inadequate in understanding the organizational
peculiarities and economic (success) patterns of Chinese business. The
1997-99 crisis served as a reminder that the economic behaviour of these
entrepreneurs, is also determined to a large extent by social, economical
and political factors in each of their respective host countries as well as
external factors (Lasserre 1988:117; Vasil 1995; Menkhoff 1998:253; Chan
and Ng 2000, 2001; Menkhoff and Gerke eds. 2002; Tsui-Auch and Lee
2003; Tan ed. 2006).
Previous explanations to this situation, which highlight the cultural
traits of ethnic Chinese in Asia, arguably imply that ethnic Chinese
entrepreneurs are members of a homogenous group of people. This is
clearly not the case as evidenced by the dichotomy of 'Chinese educated'
and 'English educated' Chinese. The implications of the above will be
spelled out in this paper with reference to the Republic of Singapore
(Kwok 1998). In the case of Singapore with its Chinese majority, it is
interesting to note that Chinese small and medium sized enterprises
arguably played a secondary role in the city-state's rapid economic
development after it had become independent in 1965. The success
of Singapore has mainly been attributed to the strategy of the leading
People's Action Party (PAP), whose aim was to develop the country
with the help of multi-national corporations (MNCs) based on export-
led growth (Low 1999).
British colonial rule represented a strong pull factor for the migration
of ethnic Chinese to Singapore. At the end of the 20
th
century, the per-
centage of Chinese descendants represented over 70 percent of the total
population. Due to the structure of the colonial school system, a certain
section of the Chinese population attended schools where English was
used as the main medium of instruction. The rest, initially the majority
but subsequently the minority, attended Chinese schools at least till
the late 1980s (Pakir 1991). This situation led to internal challenges. The
government, the majority of which were English educated intellectuals
and professionals, focused its post-independence (1965) economic de-
velopment strategies on the demands of MNCs and government-linked
companies (GLCs). At least until the recession in the mid 1980s, the small
indigenous private business sector - of which the majority was Chinese
educated did not gain much prominence (Low 1999; Ng 2002). How-
ever, this situation changed drastically after the recession in the 1990s,
when numerous SME friendly initiatives and policies were introduced
to encourage the development of local enterprises (Bjerke 1998).
Policymakers have realized that local SMEs represent the backbone of
the national economy and that they need help to master the transition to
a knowledge-based economy, a key strategic goal of Singapore's govern-
ment. All this requires the modernization of traditional structures and
mindsets which explains why the topic of this paper, namely organiza-
tional change management, is so important in Singapore's business and
society (MTI 1998; Tsui-Auch 2003; Hussey 2005; Pfeffer 2005).
Against the background of a very dynamic business environment and
rapid external change, the study is aimed at analyzing how local SMEs
cope with these demands and requirements. The core objective is to
ascertain empirically whether there is a difference between the change
management (CM) behaviour of Chinese and English educated (Chinese)
business people in Singapore or not, and to examine possible reasons.
Theoretically, the study is informed by (i) Child's strategic choice theory
(1972, 1997) which has puts primary importance on the ability of busi-
ness managers and leaders to embrace change proactively, relating
differences in managerial decision-making processes and approaches to
individual cognitive reference frameworks and (ii) the emerging theory
of Chinese enterprise management (Tong and Yong 1997; Gomez and
Hsiao eds. 2001; Menkhoff and Gerke eds. 2002; Yao 2002; Yeung 2004)
that postulates more or less substantial differences between 'traditional
Chinese' and 'modern western' management methods. In the context of
Singapore, differences that have developed historically between Chinese
and English educated businessmen within the Chinese community with
regard to their management behaviour (Chong 1987; Lau 1999; Ng 2001),
are also theoretically important.
From this, it is perhaps necessary to ask what the social-cultural and
political implications and dimensions of the difference between Chinese
and English educated Chinese people are in Singapore (Badibanga 2002).
As far as Singapore is concerned, there is the widespread perception that
Chinese and English educated Chinese people have different cultural
values and world views which is often explained with reference to their
different upbringings and educational paths. As has been stated,
Generally, the Chinese educated regarded the English educated as arrogant,
open, modern, Westernized and easygoing. The English educated thought
of the Chinese educated as conservative, parochial, chauvinistic, politicized
(as in the 1940s and 1950s) and hard-working (Lau 1999:201).
_________________________________________________________________________53
Despite mutual stereotypes and prejudices, hardly any empirical
evidence can be found about the differences between the two groups. In
fact, there is a dearth of empirical research studies on the subject, which
is somewhat surprising given the latent interest conicts between both
groups as evidenced by historical reections and the renewed interest
in Singapore's 'Chinese ground' (Straits Times 3/9/2005:S8). Possibly a
key factor in this respect is the heritage of the insufciently integrated
colonial school system with its different language orientations.
Since Singapore's early days, English and Chinese educated Chinese
developed certain (often contrary) stereotypical perceptions of each
other, which was arguably manifested in different lifestyles and con-
sumption habits caused by different cultural programmings (Lau 1999;
Siddique 2004). Subsequently, diverging political interests and social
class disparities emerged. In the 1920s, this mental divide became even
bigger and politically disruptive, due to the rise of nationalism that ig-
nited an intense interest in Chinese education. At the same time there
was a steep increase in the dissemination of communist ideologies and
political movements in several Chinese schools (i.e. those where Chinese
was used the main medium of instruction), which resulted in discrimi-
nating sanctions imposed by the ruling British colonial government.
Social class differences along language lines began to harden, as it was
easier for the English educated to secure a job in the civil service (and
later in MNCs) due to their language competence (Tan 1996). Conse-
quently, many Chinese educated Chinese people found employment in
independent micro-enterprises and SMEs. They were also known as the
'reluctant entrepreneurs'. In 1965 when Singapore became independent,
the ruling elites consisted primarily of English educated professionals,
yet a large proportion of Singapore's Chinese population was Chinese
educated.
As far as the current situation in Singapore's SME sector is concerned
(Tan, Tan and Young 2000), the research was guided by the following
broad assumptions: a) Chinese educated entrepreneurs form the major-
ity of all SME managers; b) they are generally older and have a lower
educational level than English educated entrepreneurs; c) as argued by
some key informants, Chinese and English educated Chinese entrepre-
neurs can be differentiated according to their 'traditional Chinese' (ie
Chinese educated) and 'modern-western' (ie English educated) manage-
rial behaviour (see Table 1).
Exploratory research questions included:
1. Are there differences between Chinese and English educated busi-
nessmen when it comes to strategic decisions on whether or not to
initiate organizational change measures? If yes, in what ways? If
not, why not? What is the implication of this dichotomy with regard
to change management approaches (see section 3.4)?
2. What is the implication of this dichotomy with regard to change
management approaches in general?
3. Do Chinese educated businessmen adopt more traditional (Chinese)
management and organizational practices when it comes to change
management (e.g. unsystematic, muddling through approaches)
while English educated businessmen use more modern, Western
change management methods? If yes, how can such differences (if
any) be explained?
Methodology
There is hardly any empirical material available in Singapore, which
can shed light on the change management behaviour of small rms and
possible differences between Chinese and English educated business
people. There is also limited literature concerning the socio-economic
dynamics and specics of Chinese and English educated ethnic Chinese
(Pakir 1991; Kwok 1998; Lau 1999). To tackle these issues, the research
was focused on rstly literature reviews and secondly, qualitative inter-
views with entrepreneurs, management consultants and representatives
from monetary institutions and academics. Through these interviews,
some general hypotheses were generated. The majority of the interview-
ees were identied with the help of the Singapore Chinese Chamber
of Commerce & Industry (SCCCI) and the Singapore Institute of Man-
agement Consultants. The study employed a questionnaire survey of a
population of Singapore SMEs found on the register of membership in
the Singapore Chinese Chamber of Commerce and Industry and was
across industries and business type. As Singapore SMEs are reluctant
to respond to surveys, the authors employed both postal and face-to-
face interviews to secure completion of the research instrument. The
SMEs were randomly selected from the membership database. A team
of research assistants then followed up this initial research with phone
calls to secure their cooperation.
The nal survey form (questionnaire) was divided into the following
sections: (i) demographics of respondent, (ii) business characteristics,
_________________________________________________________________________55
(iii) organizational change (iv) personality traits, (v) rm performance
and (vi) external management consultants. Two versions of the survey
questionnaire (English and Chinese) with mostly closed questions were
developed. To ensure the survey was easy to understand, different pilot
tests were conducted. As indicated above, the initial response rate was
very disappointing. We nally managed to obtain a sample of 101 SMEs.
This is a notable sample size considering the disclosure reservations of
Chinese entrepreneurs.
The SMEs surveyed were represented by the following sectors: manu-
facturing (28.7 percent), commerce (23.8 percent), professional services
(20.8 percent), retail (8.9 percent) and other sectors (17.6 percent). The
SME criterion used in the study corresponds to the denition used by
Singapore's Economic Development Board (EDB):
30 percent local ownership;
xed assets investments (FAI) of less than S$15 million;
employment size of less than 200 (less than 500 in manufacturing)
Quantitative data analyses were conducted with the help of SPSS
based on descriptive analyses, using Chi-Square tests and correlation
measures such as Cramer's V-Coefcient.
Theoretical Framework
In view of the contested issue of Chinese enterprise management (Gomez
and Hsiao 2001) with its various schools of thought such as the so-called
'culturalists' (Redding 1993) or the 'revisionists' (Yao 2002), it is perhaps
pertinent to stress that both 'oversocialised' and 'undersocialized' per-
spectives of economic action (Granovetter 1985) are important to under-
stand business behaviour of ethnic Chinese in Asia (see Menkhoff and
Gerke eds, 2002). In terms of theorizing Chinese change management
behaviour, this paper attempts to build a case for a contingent institu-
tional perspective (Clegg 1990:150-151; Tong and Yong 1997) which ties
both cultural and market forces together. Such an approach rests on
the belief that both organizational forms and management behaviour
reect what Tong and Yong have termed 'institutional belief systems'
and individual cognitive reference frameworks, which can enable or
constrict action (Child 1972, 1997). Such an approach also considers
the importance of history, which is often ignored by market and even
cultural approaches.
Tong (1996) has compared the 'typical' centralized organizational
characteristics of Chinese enterprises with the concept of 'centripetal
authority'. Often, the company founder is also the owner and manager.
The decision process is centralized around the owner and a core group
of family members. There is a low degree of delegation of authority or
responsibility because information pertaining to the company is usu-
ally considered a trade secret and distributed solely among the close
employees (usually the family members). The organization structure
is informal. The management of Chinese family enterprise has been
described as - in analogy to the traditional Chinese family system as
paternalistic, personal and authoritative (Tong and Yong 1997; Chong
1987:136). The employer has obligations vis--vis his or her employees
in return for their respect and loyalty. For example, he/she will ensure
the well-being of employees, which could include inuencing aspects
of their private lives. Selective (paternalistic) remunerations in the form
of certain privileges or monetary gifts, are used as management instru-
ments, which may lead to vast internal differences between employees
and negative group dynamics (Herrmann-Pillath 1997:116). Chinese
entrepreneurs typically believe that they are well informed. This over-
condence (Herrmann-Pillath 1997:117) may explain why decisions
are often made intuitively and why systematic strategic planning is
sometimes neglected. Relationships (guanxi) are paramount for business
initiations as the trustworthiness of a business partner is of the highest
priority. Oral agreements are seen as equivalent to contractual ones,
particularly among the older generation.
This partly explains the important role of middlemen and networks as
well as (in)formal interest groups in the Chinese business community,
as this guarantees, more or less, a 'moral' code of business behaviour
and the honouring of business deals (Chan and Ng 2000:291). Another
reason for the importance of trust, middlemen and networks, is the
hostile (institutional) environment in Asia in which Chinese entrepre-
neurs traditionally had to do business (Redding 1993; Menkhoff 1993;
Tan 2000; Menkhoff and Gerke eds. 2002).
_________________________________________________________________________57
TABLE 1: Comparison of 'Traditional Chinese' and 'Modern Western'
Organization and Man-
agement
'Traditional Chinese' 'Modern-Western'
Ownership Structure
Family-owned
Owner is usually director of
company
Various forms of ownership
Professional management /
directors
Leadership Style Authoritative Participative
Planning Intuitive Strategic
Decision Making
Centralized with minimum
participation
Decentralized, participation
and delegation
Information Manage-
ment
Information is considered as
a secret / little information
and knowledge sharing
More systematic information
sharing
Staff Development/
Training
No proper staff develop-
ment / concern that 'well-
trained' employees might
leave the company
Low budget for training
Training is seen as a form
of investment into human
capital
Relatively large budget for
training and development
Change Management
Not handled systematically as
it is not seen as an area of great
concern (muddling through)
More awareness that change is
imperative and that CM should
be based on a systematic ap-
proach
Sources: Lassere (1988); Redding (1993); Menkhoff (1993); Tong (1996); Hermann-Pil-
lath (1997); Anderson Consulting & Economist Intelligence Unit (2000); Menkhoff and
Gerke (2002)
Organizations and Management Characteristics
Table 1 illustrates potential differences between a typical 'traditional Chi-
nese organization and management style' compared to a more 'modern
Western corporate approach'. It can be argued that these characteristics
have implications for the respective change management practices of
Chinese and English educated entrepreneurs.
Child's (1972, 1997) strategic choice theory represents a suitable
analytical framework for the study for two reasons: (i) it complements
the theory of Chinese business as it puts an emphasis on the role of the
organization's top decision-maker(s) in change processes and their net-
work contacts; (ii) it highlights the cognitive framework of individual
actors vis--vis the historical dimension and dichotomy of Chinese and
English educated Chinese business people and their potentially differ-
ent CM approaches.
A key proposition of the Strategic Choice perspective is that top
organizational decision-makers have a signicant inuence on the stra-
tegic direction and associated change / adaptation processes of their
organization. Respective individual decision processes are inuenced
by several factors such as action determinism and the individual cog-
nitive reference framework, access to relevant, distinct and complete
information and internal political processes.
While political processes within organizations are difcult to examine,
it is relatively easier to examine the cognitive reference frameworks of
corporate decision-makers that represent potential core antecedents
(or barriers) of organizational change measures. According to Child,
the cognitive reference framework also inuences the interpretation of
information as well as competence in information processing (provided
that information is accessible at all in adequate form). Important cogni-
tive variables include one's own ideology and demographic traits:
that decision-makers' cognitive evaluations of the situation would
be shaped by their 'prior ideology', and this drew attention to the ways that
class, occupational and national socialization may shape managerial beliefs
about action choices (Child 1997:51).
The 'demography' of top management teams, such as the age and
educational level of their members, has also been found to exert an inuence
on the extent to which companies initiate strategic change []. Age and
education, although they locate people within social categories which can
generate common identities and beliefs, are likely to affect action determinism
not only though the medium of ideology but also through competence. Thus,
other things being equal, one would expect a young, highly educated person
to be more aware of and / or to seek out a wider range of action alternatives
than would an older, poorly educated person (Child 1997:51).
Regarding the meaning of the information used in the decision mak-
ing process, Child said:
Action determinism can lead to an unwillingness to consider information
that does not t preconceived ideas, but the scarcity of information as a
resource can also inhibit the range of choices considered. There are two issues
to note here. The rst concerns the problem of securing relevant information
that is timely, in an analyzable form and not prohibitively expensive. The
second concerns the problem of coping with information that is ambiguous,
of questionable reliability and incomplete. Decision making, especially of the
non-routine kind considered within strategic choice analysis, is thus liable
to be conducted with uncertainty (Child 1997:52).
Both Chinese business theory and strategic choice theory provide
conceptual tools for addressing the primary concerns of the study as
specied above (see 'Research Questions') and in form of the model
below.
_________________________________________________________________________59
Research Model
As illustrated in the research model (see Figure 1), the individual cogni-
tive reference framework of managers was put into operation as follows.
The variable Chinese versus English educated is regarded as a sort of
proxy for the overriding ideology in line with Child's ideas while the
variables age and educational level represent key demographic character-
istics. In addition, two control variables were looked at in relation to the
CM behaviour of the surveyed managers, namely information measured
by examining whether research subjects participated in a CM training
and the size of the organization in terms of number of employees. These
5 variables were also investigated with regard to their relationship to the
CM behaviour of the surveyed managers. As far as the CM behaviour is
concerned, the research distinguishes between two factors.
A) Initiation of Change with the independent variables introduc-
tion of change (yes/no) as well as the targets (or objects) of change
measures: organizational structure, systems and work processes, tech-
nology, people (including task behaviours), organization culture, and
organizational strategy.
B) CM Approach - with the corresponding variables as well as scale
of change measure (e.g. reactive vs. anticipative change), degree of plan-
ning the change measure before the start of implementation, resistance

A. Introduction
of Change
B. Change
Management
Application
Change
Management
Behaviour
Information
Participation in
CM-Training
Size of
Organization
Number of
Employees
Individual
Reference
Framework
Chinese versus
English
education
Age
Education Level
FIGURE 1: Research Model: Individual Reference Framework and
Control Variables, Information and Size of Organization as Inuencing
Factors of CM Behaviour
towards change, urgency of change, change leadership style, evaluation
of change benets and ability to overcome resistance to change.
The study tried to understand and evaluate the relationship between
the variables Chinese versus English educated and the actual change
measures (in terms of number, scale of change and so on) adopted by
the SME owner-managers as well as internal and external forces of
change.
Hypotheses
H1: There is a signicant relationship between the variable Chinese
versus English educated and the initiation of organizational change
in ethnic Chinese small and medium-sized enterprises (SMEs) in
Singapore.
The paper argues that English educated Chinese SME owner-man-
agers are more likely to initiate change measures than their Chinese
educated counterparts (H1a), that they do this with regard to a larger
number of change targets (H1b), and that there is a clear difference
between both groups with regard to the actual change measures (H1c)
implemented.
H2: Chinese and English educated Chinese SME owner-managers differ
in terms of their Change Management approaches.
The research expected signicant differences between both groups
with regard to people-oriented change initiatives. In particular, it was
expected that Chinese educated SME owner-managers hardly ever
initiate changes concerning (enhanced) training and development
measures, (improved) information ows as well as (greater) participa-
tion. Furthermore, the research expected differences with regard to the
assessment of the forces of change, resistance to change initiatives and
success in overcoming these barriers.
H3: Chinese educated Chinese SME owner-managers have a tendency
to adhere to 'traditional Chinese' management and organization
techniques, while English educated managers tend to adopt 'mod-
ern-western' ones.
It was expected that there is a positive association between being
English educated and change management related variables such as
_________________________________________________________________________61
the number of people related organizational changes, the scale of such
changes in terms of (enhanced) training and development, (improved)
information ows and (greater) participation, a larger degree of planning
and control, a higher perceived urgency for change, a larger magnitude
of change, and a more participatory leadership style. Consequently,
negative associations between being Chinese educated and the variables
above were expected. Furthermore, it can be argued that being Chinese
educated is positively associated with reactive change, while English
educated business people embrace change more proactively.
Research Findings
Demographic Characteristics of SME Owner-Managers
The average Chinese educated businessman surveyed was 47 years
old, male and tended to have a secondary or tertiary education. Eng-
lish educated business people averaged 41 years old, male and tended
to have a tertiary education (see Table 2 as well as Figures 2 and 3 in
TABLE 2: Frequencies of Selected Variables
Frequencies of selected
independent variables
Frequencies of control variables
for Chinese vs. English educated
owner-managers
Chin. vs. Engl.-
educated
Chinese educated: 40%
English educated: 60%
Chin.-educated Engl.-educated
Age
42 years: 49%
> 42 years: 51%
42 years: 34%
> 42 years: 66%
42 years: 60%
> 42 years: 40%
Educational
Level
Primary/secondary: 30%
Junior College/Uni: 70%
Pr/Sec.: 40%
JC/Uni: 60%
Pr/Sec: 20%
JC/Uni: 80%
CM-Training
Participated: 20%
Not participated: 80%
Yes: 20%
No: 80%
Yes: 20%
No: 80%
Size of Enter-
prise
50 employees: 75%
> 50 employees: 25%
50 employees:
70%
>50 employees:
30%
50 employees:
80%
>50 employees:
20%
Control Variables
Only a fth of the managers in both groups had participated in a CM-
related training measure. The majority of the surveyed businessmen
had less than 50 employees (see Table 2).
the Appendix). As expected, the Chinese educated businessmen in the
sample were older and signicantly lower educated than their English
educated counterparts.
Typical Characteristics of SMEs
Except for the year the company was founded, there were hardly any
differences between both groups as far as company characteristics
are concerned. The typical SME in the sample was a private limited
company (Pte. Ltd.) in which 90 percent of the managers had stakes.
External investors beyond the family circle were almost non-existent.
The majority of the SMEs employed less than 50 employees. In almost
two-thirds of all cases, the annual income in the reporting year was
more than ve (5) million Singapore dollars. Chinese educated business
people had typically established their own enterprises in the mid 1970s.
The main activity, which accounted for almost a third of the enterprises,
was manufacturing, followed by trade or professional services. English
educated Chinese businessmen had typically established their rms in
the early 1980s. Main activities, comprising almost a third of the busi-
nesses, were professional service provision, followed by manufacturing
and trade.
FIGURE 4: Quantity of Change Measures initiated by Chinese vs. Eng-
lish educated SME Owner-Managers
23
29
49
11
13
76
0
10
20
30
40
50
60
70
80
no change (23%) 1-3 objects changed
(29%)
4-6 objects changed
(48%)
F
r
e
q
u
e
n
c
i
e
s
Chinese education English education
Frequency Distribution for Initiation of Change
The data indicate that English educated Chinese SME owner-managers
initiate change more often than their Chinese educated counterparts.
In total, 89 percent of the English educated SME owner-managers
had initiated change measures compared to 77 percent of the Chinese
_________________________________________________________________________63
educated ones. However, signicant differences emerged only in terms
of the quantity of initiated change initiatives. 76 percent of the English
educated SME owner-managers reported that they had implemented
4-6 change initiatives compared to 49 percent of their Chinese educated
counterparts (see Figure 4).
Frequency Distribution for CM-Approach
With regard to the type of change, 19 percent of the Chinese educated
Chinese SME owner-managers and 10 percent of the English educated
ones, stated that their change measures were of a reactive nature. The rest
claimed that they had implemented proactive as well as reactive change
management practices in anticipation of future prospects or risks.
About 60 percent of the Chinese educated businessmen had embarked
on a detailed planning exercise before the start of the implementation,
compared to 70 percent of the English educated respondents. 70 per-
cent of the Chinese educated SMEs had experienced little resistance, as
compared to 63 percent of the English educated ones. Both groups rated
the urgency of change as high (70 percent).
60 percent of the surveyed Chinese educated businessmen assessed the
nature of the change measures implemented as incremental, as opposed to
40 percent who felt that it was radical in nature (the percentages were 80
percent and 20 percent for the English educated subjects respectively).
Surprisingly, 74 percent of the Chinese educated SME owner-manag-
ers stated that they had adopted a participatory leadership style and
80 percent of them felt that they had been successful in their change ef-
forts (compared to 65 percent and 70 percent respectively of the English
educated business people).
About 60 percent of the interviewed SME owner-managers in both
groups felt that they had been successful in overcoming barriers to
change.
People Related Change Measures and Forces of Change
Almost 90 percent of the surveyed entrepreneurs in both groups reported
that they had introduced between 7 and 9 people related changes. The
majority (70 percent in each group) initiated change measures such as
more intense consultation with employees, stronger participation of employees
in decision-making and wage increases. However, other potential change
measures, such as the introduction of a stock option scheme and prot
sharing, turned out to be irrelevant. There was one important difference
between both groups: English educated Chinese SME owner-manag-
ers felt very strongly that more consultation with employees is critical.
As the survey data show they had implemented respective measures
signicantly more often (Cramer's V=0.3; p=0.04) than their Chinese
educated counterparts.
Both groups assessed the internal forces of change impacting upon
their businesses as important and critical, but showed pronounced
differences with regard to the evaluation of the magnitude of external
forces of change. Statistically signicant differences, however, could
not been established.
Key Results
H1: partially veried
English educated Chinese SME owner-managers turned out to be more
active initiators of change measures compared to their Chinese educated
counterparts (Cramer's V=0.16; p=0.13) as they had implemented sig-
nicantly more change measures (Cramer's V=0.29; p=0.03).
H2: partially veried
People related change measures initiated by both groups turned out to be
quite similar in terms of quantity and type. However, English educated
managers perceived stronger consultation with employees as a critical
change measure in contrast to Chinese educated business people (Cram-
er's V=0.3; p=0.04). While the surveyed managers viewed the impact of
the internal forces of change on their businesses in a similar way, external
forces of change were evaluated differently, especially with regard to
the changing economic and trading conditions as well as distribution
patterns. No important differences were found regarding the barriers
to change and the degree of success in overcoming such hurdles.
H3: not supported
Statistically relevant differences between both groups with regard to
their respective CM approaches could not be established. The change
management data indicate, that there is no empirical support for the ar-
gument that Chinese educated Chinese SME owner-managers adhere to
more 'traditional Chinese' management and organizational techniques,
while English educated managers employ 'modern western' ones when
it comes to people-related change, the scale of change, planning intensity
or the magnitude of change.
_________________________________________________________________________65
Central Results for Demographic and Control Variables.
A strong (anticipated) relationship between age and the initiation of
change measures could not be established. Regarding the CM approach,
however, age mattered as older managers in particular had developed a
detailed plan before the implementation of the change measure (Cram-
er's V=0.35, p 0.01). They also rated the urgency of change higher than
younger businessmen. In addition, the more experienced businessmen
stated that they were more successful in overcoming barriers to change
compared to their younger counterparts.
There was also no signicant correlation between the educational
levels of the surveyed SME owner-managers and the initiation of change
variable. With respect to the actual change measures implemented,
however, the data analysis revealed that entrepreneurs with higher edu-
cational levels had more often initiated changes in the area of employees
and their task performance than managers with lower educational levels.
With regard to the CM approach, the survey showed that managers with
lower educational levels had initiated a signicantly higher extent of
change measures in their organizations (Cramer's V =0.29; p 0.01). The
data also suggest that managers with higher educational levels exercise
a more participatory style of change leadership.
As far as the relationship between the size of the enterprise and the ini-
tiation of change is concerned, managers of large enterprises turned out
to be more active initiators of change measures than leaders of smaller
rms. Moreover, there were differences concerning the actual change
targets and initiatives implemented. In large enterprises, people-related
change measures were more profound (Cramer's V=0.3, p 0.01).
No statistically relevant relationship could be established between
any participation in CM training and the initiation of change. However,
there were signicant relationships as far as the actual change targets
and measures are concerned. Participants of CM training measures
had initiated signicantly more change measures with regard to or-
ganizational structures (Cramer's V=0.22, p 0.05), systems and work
processes (Cramer's V=0.24, p 0.05) as well as employees and their
task performance (Cramer's V=0.27, p 0.025) than non-participants.
A similar trend could be established with regard to technology related
change measures.
Up-to-date and clear-cut information, i.e. formal knowledge of CM,
turned out to be very crucial for the chosen CM approach. Participation
in CM training was related to almost all CM approach variables, except
for urgency of change and extent of change. Participants of CM training
measures had conducted signicantly more change impact studies than
non-participants (Cramer's V=0.29, p 0.01). They were also signicantly
more successful in overcoming barriers to change (Cramer's V=0.32, p
0.01). With regard to the nature and type of change initiatives, the
study revealed that CM participants in particular had initiated proac-
tive, anticipative change measures based on detailed plans and a more
participatory change leadership style. Contrary to non-participants,
they also experienced lesser barriers to change and claimed to be more
successful in overcoming barriers to change.
Summary and Conclusions
The assumption that English educated Chinese SME owner-managers
are more likely to initiate change measures than Chinese educated (H1)
was partially veried. The same is true for H2, i.e. the assumption that
there are differences between both groups with regard to their CM
approach. H3 in contrast, i.e. the assumption that potential differences
between both groups with regard to their CM behaviour can be traced
back to cultural specics (e.g. in terms of their 'traditional Chinese'
and/or more 'modern-western' managerial orientation) could not be
ascertained. In fact, the study found contradictory statistical trends and
percentage differences for some variables, e.g. in the form of Chinese
educated Chinese business leaders with (for us surprisingly) democratic
change leadership styles.
With regard to the research model, the results of the study can be
summarized as follows. There is a relationship between the individual
cognitive frame of reference of SME owner-managers and the initiation
of change. The variable Chinese versus English educated does play a
central role, and more empirical research is required to examine its
business implications. As far as the CM approach related variables are
concerned, age and education turned out to be of signicant importance
(they mattered less in terms of the initiation of change). There were also
close connections between the control variables and the initiation of
change with company size playing a key role. Information and participa-
tion in CM training measures were closely related to all CM-approach
related variables.
The difculty still lies in how it is possible to explain the fact that H3
was not supported. One reason might be the biased sample structure
with regard to age (one-sided age distribution; 70 percent of the partici-
_________________________________________________________________________67
pants fell into the age group of 35 - 45 years of age), the high education
and language prociency of the respondents (many of the younger
entrepreneurs sampled are probably bilingual due to the implementa-
tion of bilingualism in Singapore's education system a few years ago).
Another possibility is that time contingencies may have reduced pos-
sible differences between both groups and that there is a convergence
of styles (Triandis & Gelfand 1998; Hornidge 2004; Quinn Mills 2005;
Yeung 2006).
Due to the signicant relationship between the variable participa-
tion in CM training and the CM behaviour of the survey participants,
as well as their different assessments of the external forces of change, it
can be argued that differentiating Chinese and English educated SMEs
is less relevant as a result of an overriding ideology which inuences
their individual frames of reference. However, it does matter when it
comes to getting access to crucial information resources, depending
on the dominant language used. In the context of change management
and business, access to modern English business media, the integra-
tion in regional/global network relations and/or professional change
management expertise from consultants are crucial. Further research
is necessary to substantiate this argument. With regard to this, future
research would expand the analytical range of Strategic Choice Theory
in the area of CM by incorporating group-specic information gathering
strategies and their effects.
Due to the lack of representative data and comparison opportuni-
ties with other research projects, the survey has the character of an
explorative baseline study. A generalization of the results is not pos-
sible without further research. One tentative conclusion is that there
are differences in the CM-behaviour of Chinese and English educated
Chinese business people in Singapore. In rms owned and managed
by Chinese educated business people, the type of change seems to be
more reactive; the planning of change is at times rather unsystematic;
the nature of change more incremental and the change leadership ap-
proach surprisingly participatory. Despite this, all these differences are
less pronounced than commonly expected. Cultural specics of the two
groups play at least statistically - no visible role in their CM-behaviour.
While the results contradict the perceptions of many local interview-
ees, businessmen and academics, they are in line with the arguments
of contemporary Chinese management researchers who have argued
that culturally based explanations are insufcient in accounting for the
business practices of ethnic Chinese entrepreneurs (Tong and Yong
1997; Chan and Ng 2000, 2001; Menkhoff and Gerke eds. 2002; Yao
2002; Yeung 2004, 2006). The data emphasize the dynamics and rapid
modernization of SMEs in Singapore.
Most important for a better understanding of sub-ethnic dimensions
in the CM-behaviour of Singapore's ethnic Chinese SMEs, appears to be
the role and meaning of information. The survey data suggest that both
groups have different sources of retrieving information and that English
educated entrepreneurs possess an advantage over Chinese educated
businessmen through their relatively easier access to international media
and networks. Therefore, future 'CM studies in the Chinese business
world' that intend to utilize Child's strategic choice framework should
expand the analytical scope beyond the cognitive reference framework
of actors by examining structure and function of 'Chinese' information
and knowledge management approaches (Menkhoff, Evers and Chay
eds. 2005; Menkhoff, Pang and Evers 2007). China's rise and its impli-
cations for the competitive edge of Singapore's 'new Chinese ground'
(Straits Times 3/9/2005:S8) whether they are bilingual and passionate
about Chinese culture or 'fair-weather Chinese' (i.e. English speakers
who are rediscovering their roots, including speaking Mandarin and
often driven by economic motives) represent other interesting topics
for future research.
Thomas Menkhoff is Practice Associate Professor of Organizational Behavior
at Lee Kong Chian School of Business, Singapore Management University
(thomasm@smu.edu.sg); Ulrike Badibanga (badibanga_ulrike@freenet.de);
Chay Yue Wah is Associate Professor of Psychology at School of Science and
Technology, SIM University, Singapore (ywchay@unisim.edu.sg)
NOTES
1 This is a revised version of a paper presented by Thomas Menkhoff at the Third
International Conference of Institutes & Libraries for Chinese Overseas Studies,
Singapore, 2005 on 'Maritime Asia and the Chinese Overseas 1405-2005' held at the
RELC International Hotel, Singapore, 18-20 August 2005. The authors are indebted
to two anonymous reviewers who helped to streamline the paper
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APPENDIX
FIGURE 2: Age Distribution of Chinese educated and English edu-
cated SME Owner-Managers
29
51
20
6 6
42
40
9
4
0
10
20
30
40
50
60
25 years
old
35 years
old
45 years
old
55 years
old
65 years
old
P
e
r
c
e
n
t
a
g
e

F
r
e
q
u
e
n
c
y
FIGURE 3: Highest Attained Educational Qualication of Chinese
and English educated Business People
6
35
21
38
4
18
24
55
0
10
20
30
40
50
60
1 2 3 4 5
P
e
r
c
e
n
t
a
g
e

F
r
e
q
u
e
n
c
i
e
s
No formal
education
University
& above
Primary
school
Secondary school
/vocational
institution
Junior college
_________________________________________________________________________73
FIGURE 5: Signicant Relationships and Trends between Initiation of
Change and Selected Variables
FIGURE 6: Signicant Relationships and Trends between Change
Management Approach and Selected Variables
Individual Reference
Framework
Chinese-/ English -
Educated
Age
Education Level
A. Initiation of Change
Change Yes/No
Number of change targets
and measures
Choice of object and
change agents
Organizational
structures
Systems and work
processes
Technology
Employees and task
performance
Organizational culture
Strategy
Information
Participation in
CM Training
Size of Enterprise
Number of
employees
`
0.16*
0.29**
0.18*
0.2*
0.2*
0.19*
H1c
H1a
H1b
0.17*
0.29*
0.22*
0.24**
0.2*
0.27**
0.31**
0.17*
**Cramer's V at a significance of p=0.05: A significant relationship of the variables is assumed
* Cramer's V at a significance of p=0.25: A trend is assumed due to the small sample size.
Chinese-/ English -
Educated
Age
Education Level
B. Change Management
Approach
Nature of Change
Detailed planning before
implementation

Barriers to change Information
Participation in
CM Training
Size of Enterprise
Number of
employees
0.22*
0.17*
0.2*

Urgency of change
Extent of change
Change leadership style
Degree of success
Ability to overcome barrier
0.22*
0.2* neg

0.19*
0.17*

0.35 **
0.29**
0.29**
0.32**
0.17*
Individual Reference
Framework
** Cramer's V at a significance level of p=0.05: A significant relationship of the variables is assumed.
* Cramer's V at a significance level of p=0.25: A trens is assumed due to the small sample size.

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50 ______________________The Copenhagen Journal of Asian Studies 252007

Thomas Menkhoff, Ulrike Badibanga & ChayYue Wah __________________________

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